NDER WORKING PAPERS SERIES

IMMIGRATION POLICY, NATIONAL ORIGIN, AND IMMiGRANT SKILLS:A COMPARISON OF CANADA AND THE UNITED STATES

George 3. florjas

Working Paper No. 3691

NATIONAL BUREAU OF ECONOMIC RESEARCH1050 Massachusetts Avenue

Cambridge, MA 02138April 1991

The author wishes to thank the William N. Penner Foundation forfinancial support. This paper is part of NBERs research programin Labor Studies. Any opinions expressed are those of the authorand not those of the National Bureau of Economic Research.

NBER Working Paper 1#3691April 1991

IMMIGRATION POLICY. NATIONAL ORIGIN, AND IMMIGRANT SKILLS:A COMPARISON OF CANADA AND THE UNITED STATES

ABSTRACT

Over 12 million persons migrated to Canada or the United

States between 1959 and 1981. Beginning in the mid—1960s, the

immigration policies of the two countries began to diverge

considerably: the United States stressing family reunification

and Canada stressing skills. This paper shows that the point

system used by Canada generated, on average, a more skilled

immigrant flow than that which entered the United States. This

skill gap, however, is mostly attributable to differences in the

national origin mix of the immigrant flows admitted by the two

countries. In effect, the point system aworksh because it alters

the national origin mix of immigrant flows, and not because it

generates a more skilled immigrant flow from a given source

country.

George 3. DorjasDepartment of Economies, 0508University of CaliforoiaSan Diego

La Jolla, CA 92093

IMMIGRATION POLICY, NATIONAL ORIGIN, AND iMMIGRANT SKILLS:A COMPARISON OF CANADA AND THE UNITED STATES

*George 3. Borjas

L Introduction

Roth Canada and the United States are important participants in the

ieusigration market. These two countries admitted over 12 million immigrants

between 1959 and 1981. In recent years. their immigration policies have

diverged considerably. Prior to the early i96Os, both Canada and the United

States used national origin to allocate the scarce nueiher of visas aoong the

many applicants, preferring persons originating in northwestern European

countries.1 During the l96Os, the two countries enacted major immigration

policy changes. As a result, the United States began to award entry permits

on the basis of the applicant's family ties with U.S. residents or citizens,

while Canada began to allocate visas on the basis of the applicant's

observable socioeconomic characteristics.

The historical comparison of isusigrant skills and labor market

performance between Canada and the United States, therefore, can provide

useful lessons into the benefits and costs of skill-based immigration

policies. Earlier work has documented important differences hetwecn the

Canadian and American experiences.2 This paper conrinues this line of

research and documents that many of the differences in the economic impact

of foreign-born workers on Canada and the United States can be understood in

terms of a simple hypothesis: the national origin composition of immigrants

in the two host countries is different.

The source country distribution of immigrant flows plays a crucial role

because there is substantial dispersion in skills and labor market

2

performance among national origin groupa (Borjas, 1987; Jasso and

Rosenzweig. 1986). In general, immigrants originating in industrialized

economies are more skilled and ate more successful in the host country's

labor market than isanigtants originating in the less-developed countries.

The empirical analysis below shows that the observed differences between

Canada and the United States in the average skill level of foreign-born

workers can be mostly explained by differences in the national origin cix

of the immigrant flows admitted into the 140 countries.

This finding raises important questions about the efficacy of Canada's

point system. My empirical analysis indicates that the point syotea "works'

not because ii attracts more skilled workers from a particular source

country, but because it alters the national origin mix of the immigrant

flow.3 This implication cf the empirical evidence provides a very different

understanding of how a point system increases rho average skills of foreign-

born workers.

II. Immiaration Policies Between 1980 and 1980

Prior tn the 1965 Amendments to the Immigration and Nationality Act,

U.S. irsmeigration policy was guided by the national-origins quota system.4

Entry visas allocated to countries in the Eastern Mersisphere depended

proportionately on their representation in the national origin composition

of the U.S. population in 1920. Because the ancestors of the great majority

of U.S. residents originated itt northwestern Europe, the United Kingdom wcs

allocated 65,721 visas (almost half of the 150,000 available visas) and

Germany was allocated 25,957 visas, while Italy was allocated 5,902 and

Russia was allocated 2,784 visas. To prohibit the entry of Asian

immigrants, Asian countries were generally allocated 100 visas per year.

The national-origins quota system applied only to visa applicants

originating in countries in the Eastern Hemisphere. Applicants [coin North

and South America were exempt itom the quotas and faced no numerical

resLrictions on the number of visas, presuemably because of the close

economic end political ties between the United Srates and its geographic

neighbors. These visas were awarded on m first-come, first-served basis as

long as the applicants satisfied a long list of requirements regarding their

health and their political and moral backgrounds.

The 1965 Amendments (and subsequent revisions) regulated the process of

legalimmigration throughout the 1970s and l9SOs. Under the 1965

Amendments, the United States permzmitted the entry of 270,000 persons per

year, with no more than 20,000 iaammigrants originating in any particular

country of origin. Instead of enphasizing national origin, the 1965

Amendments made family reunification the central objective of imasigration

policy. This was accoaplished through several provisions. First, go

percont of the 270,000 numerically limited visas were awardnd to "close"

relatives of U.S. citizens or residents. These close relatives included

unmarried adult children of U.S. citizens, siblings of adult U.S. citizens,

and spouses of resident aliens. The renaming 20 percent of the visas were

allocated to persons on the basis of their skills. A large number of these

Sim,000 visas, ho,.mever. went to the fanilies ef the skilled workers who

qualified for the visa.

Furthermore, parents. spouses, and minor children of adult U.S. citizens

could bypass the numerical restrictions specified in the legislation, These

"immediate" relatives automatically qualified for entry, and did not have to

apply for one of the 2)0,000 numerically United visas. By the late 1981k,

aore immigrants were entering under this single provision of the law than

under all the family reunification preferences combined.

Until l9il, Canadian immigration policy, like that of the United States,

permitted the entry of persons originating in only a few selected countties,

such as the United Kingdom, Ireland, and tha United States, or of persons

who were dependents of Canadian residents. Major policy changes in 1962 and

1967 removed the national origin restrictions, and shtfted the emphasis in

the visa allocation system towards skills requirements. Under the new

regulations, applicants for entry into Canada were classified into three

categories: sponsored immigrants (which included close relatives of

Canadian residents), nominated relatives (which included more distant

relatives of Canadian residents), and independent immigrants.

Beginning in 1967, visa applicants in the last two of these categories

were screened by means of a point syateo Potential migrants were graded

and given op to 100 points. Points were awarded according to the

applicant's education (a point per year of schooling, up to 20 points).

occupational demand (up to 15 points if the applicant's occupation was in

strong demand in Canada), age (up to 10 points for applicants under the age

of 35, minus 1 point for each year over the age 35), arranged employment (10

points if the applicant had a job offer from a Canadian eaployet), a

"personal assessment" by the immigration officer based on the applicant's

- 5motivation and initiative (up to 15 points), and other factors. Generally,

en applicant needed to obtain 50 out of the 100 total points in order to

pass the test and be awarded an entry visa.

In 1976, Canada amended its Immigration Act and made it easier for the

I

5

families of Canadian residents to migrate there. This was accomplished

through a revised point system that, in essence, awarded extra points to

nominated relatives. To socc extent, Canada enacted a weak version of the

1965 Aisendxsents eleven years after the United States.

Certainly the most noticeahle consequence of the major policy shifts in

Canada and the United States is the change that occurred in the notional

origin mix of the immigrant flow. Table 1 summarizes the national origin

distribution of the iamigrant flows admitted between 1959 sod 1981. Curing

the 1960a, about 40 percent of immigrants entering the United States

originated in Europe. This had declined to 17 percent by the 1970s. In

contrast, only 12.8 percent of immigrants in the 1960s originated in Asian

countries, and this tripled to 37.2 percent by the 197Oa.

Similar changes were also observed in Canada. For instance. 70 percent

of immigranta entering Canada in the l960a originated in the United Kingdom

or in other European countries. During the l9lOs, the fraction of the

immigrant flow originating in Europe was cut by half, to 37 percent. On the

other hand, the fraction of icesigrants originating in Asia almost

quadrupled, from 8 percent in the l9iOs to 29 percent in the 19?Oa.

Although the trend sway from European immigration and towards Asian

immigration characterixes the experience of both Canada and the Unites

States, it is important to note that there were significant differences in

the national origin mix of the immigrant flow between the two host countries

in the l9JOs. The fraction of immigrants originating in Europe was more

than twice as large in Canada, while the fraction of immigrants originating

in the Americas (primarily Lotin America) was slaost three times as large in

the United States. I will show that these national origin differentials

TABLE 1

HICR.ATION FLOWS INtO CANADA AND THE UNITED STATES 1959-1981

Canada

1959-1970 1971-1981

Number % of Number 8 ofOrigin fj_flQOs fln l000s) Total

Africa 34.1 2.1 71.5 4.6Americas 263.5 17.5 427.9 27.3Asia 136.3 8.4 457.3 29.1United Kingdom 381.2 23.5 237.8 15.2Europe (excluding 745.4 46.0 340.1 21.7

United Kingdom)Oceania & Other 40.2 2.5 34.3 2.2

Total; 1620.7 1568.9

United States

1959-1970 1971-1981

Number 8 of Number 9 ofOrigin (in l000s) Total (in I000s) Total

Africa 43.2 1.1 106.5 2.0Americas 1792.0 46.6 2175.7 42.7Asia 492.2 12.8 1898.1 37.2United Kingdom 268.8 7.0 138.5 2.7

Europe (excluding 1226.2 31.9 729.5United Kingdom)

Oceania & Other 23.4 .6 41.5 .8

Total: 3847.8 5089,9

Sources: Leahy (1983); U.S. Immigration and Naturalization Service (variousissues)

I

explain a major portion of the gap in average skills beLween immigrants in

Canada and the United States.

III. Education and the 'Choice of a Host Country

As a result of changes in immigration policy (as well as changes in

economic conditions in the host and source countries), the relative size and

skill composition of immigrant flows into Canada and the Unired States

changed drastically in recent years. This section and the next describe the

extent of these changes.

Consider the population of persons who imisigrste at any given time

period into either Canada or the United States. These data can be used to

calculate the fraction of immigrants who choose' one country over the

other. Table 2 reports the fraction of immigrants, by cohort and

educational attainment, who migrated to the United States.

I estimate the fraction of immigrants who choose the United States using

the Public Use Samples of the 1971 and 1981 Canadian Censuses and the 1970

and 1980 U.S. Censuses. The 1971 data are drawn from a 1/100 randcm sample

of the Canadian population, while the 1981 data are drawn from a 2/100

sample. The 1970 U.S. Census data for iimeigrants is a 2/100 random s-ample

of the immigrant population, while the 1980 data is a 5/100 sample. The

1970/1971 Censuses are used to estimate the choice probabilities for the

cohorts that migrated during the 1960s, and the 1980/1981 Censuses are used

for estimating the choice probabilities of the cohorts that migrated in the

l970s.6 Finally, the probabilities are calculated in the sample of

immigrants (both men and women) aged 18-64.

Between 1960 and 1980, 81.5 percent of the immigrants "chose" to reside

TABLE 2

IH8{IORATION TO CANADA AND THE UNITED STATES• BY COHORT AND EDUCATiON

Fraction of Immigrants Choosing US.

Education

C

Cohort fljEh_School School cdie&e Graduate All1960-64 .721 .864 .750 .824 .772

1965-70 .719 .780 576 .770 .719

1970-74 .621 .798 .740 .828 .804

1975-80 869 .851 .831 .690 +861

All .815 .825 .765 .849 .815

Source: The data for the l96064 and 1965-70 cohorts are drawn from the1971 Canadian Census and the 1970 U.S. Census. The data for the 1970-74 and1975-80 cohorts ate drawn from the 1981 Canadian Census and the 1980 U.S.Census. The statistics are calculated in the sample of immigrants aged 18-64.

in the United States. Note, however, that this statistic increased rapidly

during the period. In the early 1960s, 77.2 percent of the sample migrated

to the United States, while in the late 1970s 86,1 percent chose the United

States, This reallocation of isssigrants in the North American continent is

due to the fact that policy changes in the United States increased the

annual number of iisisigrants, while the size of the annual iineigrant flow in

Canada remained relatively constant (see Table 1).

A more interesting result revealed by Table 2 concerns the differential

trends in the choice probability across schooling groops. Although the

fraction of immigrants ending up in the United States increased in moat

schooling groups, the increase was largest among the least-educated. In the

eatly l960s, 72.1 percent of immigrants who did not have a high-school

diploma migrated to the United States. By the late 1970s, this statistic

was 86.9 percent. an increase of almoat 15 percentage points. In contrast,

in the early 1960s, 82.4 percent of isssigrants with a college diploma chose

the United States, hut by the early l97Ds, the fraction increased to only

89.0 percent, loss than 7 percentage points.

Immigration policy reforms in Canada and the United States are probably

responsible for these trends. Prior to the ensctmcnr of the point system in

Canada, relatively more college graduates "chose" the United States as a

destination point. By the late 197Dm, after Canada began to restrict the

entry of high school dropouts, the fraction of persons choosing the United

States was the same for high school dropouts as for college graduates.

IV. Immirrant Earnines in Canada and the United $tates

Suppose two Census cross-sections are available in a particular host

8

country (the 1971 and 1981 Censuses in Canada, or the 1970 and 198C Censuses

in the United States), and the iollowing regression model is estimated

within a host country:

(1) lowj —Xfl1+a1y +o2y +tC+ ix +

(2) log w2 — + 7w2 + C2

where Wjj is the wage rate of immigrant j; w is the wage rate of native

person 2; X is a vector of socioeconomic characteristics (e.g., education,

age, etc.); y is a variable measuring the number of years that rho immigrant

has resided in the host country; C is a vector of dummy vatiahles indicating

the calendar year in which the migration occurred; and w ia a dummy variable

set to unity if the observation is drawn froa ihe 1980/1981 Census, and zero

otherwise. The vector of parameters (0102) along with the age

coefficients in the vector X, measures the assimilation effect (i.e. , the

rate at which the age/earnings profile of itsaigranis is converging to the

age/earnings profiles of natives), while the vector of parameters fi

estimates the cohort effects. The period effects arc given by -y for

immigrants and by 1n for natives.

It ie well known that the parameters of the system in (1) and (2) are

not identified unless some normalization is made about either the aging,

cohort, ot period effects (Serjes, 1991). In other words, two cross-

sections cannot identify three separate sets of coefficients, and something

must be assumed about one of the effects in order to identify the other two.

:1

I choose the normalization that the period effect experienced by immigrants

is identical to the period effect experienced by natives (-y) - This

normalization, of course, implies that the relative wage diiierential

between immigrants and natives is invariant to the business cycle.

The data used to estimate (1) and (2) are drawn from the Canadian and

U.S. Censuses described in the previous section. The regression analysis is

restricted to prima-age men (aged 25-64), who are not self-employed, whose

records report the relevant information needed to calculate a wage rate in

the year prior to the census, and who are not residing in group quartets.

Although all immigrant observations are used in the analysis, I use random

samples of the native population in the United States because of the large

number of natives surveyed.7

The mean characteristics in these samples are reported in Table 3 for

the post-1960 cohorts. The descriptive data yield a number of important

results. The U.S. Census clearly documents the importance of cohort effects

in immigrant labor market performance. The most recent arrivals in the 1970

Census (i.e., the 1965-1969 cohort) have - .3 years fewer education than

natives, and earn about 16 percent less than natives. By 1980, the moat

recent arrivals (i.e., the 1975-1979 cohort) have - .8 years fewer years of

schooling and earn almost 30 percent less than natives.

Remarkably, despite the enactment of the poiot system, the Canadian data

shows a somewhat similar pattern. The educational attainment of the most

recent immigrants in 1971 is 12.0 years, while that of the most recent

immigrants in 1981 is 12.6 years, an increase of over half a year in

schooling. At the same time, however, the educational attainment of recent

immigrants teistive to Canadian natives declined from a 2.1 year advantage

TABLE 3

EDUCATION AND WAGES OF IMNIGNANTS IN CANADA AND THE UNITED STATES, BY COHORT

Canada

1971 1981

Relative Relative RelatIve RelativeCohort Education Education Hate Education 4qc_aLion Wage

1960-64 10.506 .599 -.008 11.117 - .086 .048(4.51) (-.44) ( 94) (337)

1965-70 12.043 2.136 - .021 12.351 1.048 .065(21.34) (-1.51) (13.69) (6.24)

1970-74 --- 12.370 1.067 - .084(13.55) (-6.83)

1975-80 --- --- --- 12.603 1.300 -.172(16.32) (-13.86)

United States

1971 1981

Relative Relative Relative RelativeCohort Education Education Wate Education Education West

1960-64 10.959 - .556 - .051 11.913 - .793 .009(-9.21) (-5.79) (-14.91) (1.16)

1965-70 11.179 - .336 - .160 11.418 -1.288 -.069(-6.01) (-19.75) (-25.75) (-9.90)

1970-74 --- 11.091 -1.614 - .200(-33.33) (-29.43)

1975-80 11.859 - .846 - .299(-17.54) (-44.28)

Note: The t-ratioa are reported in parentheses. The sample sizes are asfollows: 1971 Canadian Census: 8018 immigrants and 28049 natives; 3981Canadian Census: 17417 immigrant and 61205 natives; 1970 U.S. Census:32491 immigrants and 20978 natives; 1980 U.S. Census: 134254 immigrants and15071 natives.

I.

10

in 1971 to a 1.3 year advantage in 1981, and the relative wage of recent

immigrants decreased from -2.1 percent in 1971 to -17.2 percent in 1981.

Although the educational attainment of successive immigrant waves rose over

time, the educational attainment of the native Canadian population was

rising even faster.

This result, however, should not obscure the fact that the point system

attrmcted a mote educated immigrant flow Into Canada, In the early 1960s,

prior to the immigration reform in Canada, the typical immigrant entering

Canada had .4 fewer yeara of schooling than the typical immigrant entering

the United States (where the educational attainment is measured as oi

1970/1971), The Canadian disadvantage in immigrant schoolicg disappeared by

the late l960s, when the typical new immigrant in Canada had almost one year

more schooling than the typical new immigrant in the United States, and this

gap remained roughly constant throughout the l9lOs.

The dependent variable in (1) and (2) is the logarithm of the wage rate.

I use two different specifications for the vector X. The first includes an

intetcept, age, end age squared, while the second adds education, maritat

status, whether the individual lives in a metropolitan area, and whether the

individual's health limits work (available only for the United States).

The estimated regressions are presented in Appendix Table A-i for Canada and

A-2 for the United States. Table 4 suaniarites the impllrations of the

regressions by reporting the wage differential between immigrants and

natives at the time nf entry into the host country (assuming immigration

takes place at age 20), and the rate of growth of ieatigrant earnings

relative to natives at y—lO and y'-20.8

The results indicate that immigtants in Canada have substantially higher

TASLE 4

PREDICTED ENTRY WAGES AND GROWTh RATES FOR 1MHI0FIANTSIN CANADA AND Till UNITED STATES

Canada United States

Cohort .011 .021

1960-64 - .0325 - .0242 - .0975 - .0932(-1.16) (- .90) (-5.18) (-5.22)

1965-69 .0045 - .0255 - - 1542 - .1200(.20) (-1.13) (-9.23) (-7.53)

1970-74 .1043 - .1320 - .2353 - .1632(-4.33) (-5.69) (-15.D8) (-10.97)

1975-80 -.1531 - .1839 -.2941 - .2290(-7.32) (-9.11) (-20.18) (-17.21)

Growth Rate, .0032 .0006 .0051 .0054

y—ID (2.09) (2.81) (5.01) (9.23)

Growth Rate, .0033 .0008 .0020 .0027

y—2O (2.08) (2.75) (5.09) (9.21)

holds Constant No Yes No . YesDemographicCharacteristics

Note: The t-ratios are reported in parentheses. The vector X in theregressions underlying the eatieares in coluxiris (1) include age end age

squared. The regressions in cnltrnin (2) add education1 marital sterns,metropolitan residence, and an indicator of whether health limits work(available only in the United States).

4,

11

entry wages (relative to natives) than immigrants in the United States if

the regressions do not control for differences in educational attainment and

other socioeconomic characteristics. For instance, the typical person who

migrated to Canada in the late l970a earns ahout 15 percent less thou

natives at the tioe of arrival, while rhe typical person who migrated to the

Unired States at the same time earns about 29 percent less than natives.

The superior economic performance of immigrants in Canada, however, largely

disappears after controlling for differences in observed demographic

characteristics (particularly education) between irosigrants and natives in

each host country. The predicted difference between the (log) wage of

immigrants who arrived in the late l9]Os and demographically cnmparahle

natives is .l in Canada and - .23 in the United States. lhe skill

filtering explicit in Canadian immigration policy, therefore, leads to

higher-woge imsrigrants not because oi unobserved factors such as ability and

training, hut because they ore oore educated.

The data in Table 4 indicate that the enactment of a point system in

Canada could not prevent a decline in the relative skill Jevel of immigrants

across successive waves. In both countries, the entry wage of isimigrarits is

higher for the earlier cohorts than for the later cohorts. Tho decline in

isasigrant skills (as measured by the unadjusted wage), however, is much

steeper in the United States, where the (relative) entry wage fell from -.10

in the early lS6Os to - .29 in the late 1920s. gy contrast, in Canada, the

entry wage fell from - .03 to - .15 during the same period.

V. liatlonal Origin and the Canada-U.S. Skill Differential

This section shows that one single factor, the different national origin

12

mix of immigrants in Canada and the United States, explains most of the

differences in skills and relative wages of the foreign-horn between these

ii

two countries. In Section IT, I docwsented that the national origin mix of

the immigrant flow differs between Canada and the United States. There also

exists substantial dispersion in skills and wages across national origin

groups in each of the host countries.

I focus on three neasures of skills: years of educational attairaaent,

the log wage rate (relative to natives) . and the log wage differential

between isasigrants and natives adjusted for diffetences in socioeconomic

characteristics (such as education and age) between the two groups. To

calculate the adjusted wage. I first estimated log vage regressions

separately fat each national otigin gtonp and for natives in each of the

four Censuses available (two Censuses per host country). Using the

estimated coefficients, I caltulated the wage differential between each

immigrsnt cohort and nstives using the mean of the socioeconomic

characteristics observed in the immigrant population. The statistics for

the cohorts that migrated during the l9iOs are obtained from the 1970/1971

Censuses, while the statistic for the cohorts that siigtared in the i9lOs

are obtained from the 198T/198l Censuses. To illustrate the latge

dispersion thst exists across national origin groups, Table 5 teporta the

educational attainment, relative wage, and adjnsted wage for the cohort that

migrated in the late 1970s fer 15 national origin groups (which are the 15

groups that can be matched exactly among the four Censuses),9

The average educational attainment level of immigrante from Greece who

arrived in Canada in the late 19/Os was 8.3 years, while the average

education level of immigrants from Belginm was U.6 years. Similatly, in

TABLE 5

SCHOOLING AND WAGES BY NATIONAL ORIGIN, 1975-1980 COHORT

Canada United States

Country of Relative Adjusted Relative AdjustedOrigin Education Education

Europe:

Belgium 16600 0661 0411 16.239 0.456 0.293France 13359a 0004a _0•037a 15.626 0.252 0.161

Germany 13.705:0.084 -0.008 15.237 0.291 0.171

Greece 8.271 -0.482 -0.310 11.058 -0.311 -0.181Ireland 13.333 -0.443 -0.514 15.803 -0.114 -0.121

Italy 9.833 -0.212 -0.153 1O567 -0.133 -0.065Netherlands 13.333 0194a o235 15.939 0.311 0.172Poland l4500 0049a 12.742 -0.342 -0.339United Kingdom 13068a OO62 0O2l 15.047 0.221 0.118USSR 14.455 -0.099 -0.311 14.328 -0.257 -0.386Other Europe 9.64C -0.101 -0.026 11.118 -0.141 -0.061

Africa 13772a -0.159 -0.264 15.362 -0.210 -0.268Asia l2.860 -0.290 0,348 13.966 -0250 -0.294Latin America ll.7O6 -0.354 -0.369 8.551 -0.532 -0.165Other 12.698 -0.062 -0.103 12.017 -0.230 -0.126

aThe difference between Canada and the United States is significantlydifferent from zero at the 5 portent level.

13

the United States, the average education level of immigrants who arrived in

the same period ranged from 8.6 years far immigrants from Larin America to

16.2 years far workers who migrated from Belgium. The relative wage of

immigrants exhibits similar dispersion across national origin groups. The

relative (log) wage ranges from - .4 (Creek immigrants) to .66 (Belgian

immigrants) in Canada, and from - .53 (immigrants from Latin America) to .46

(Belgian immigrants) in the United States.

As suggested hy these descriptive data, there is a very strong

correlation between the skills of national origin groups in Canada and the

skills of the corresponding group in the United States. Table 6 presents

regressions which describe the relationship between the skills of national

origin groups across host countries. These regressions are of the form:

(3) y.(t) — p0 + p1y. (t) +

where y. is the value of the skill variable for immigrants belonging to

oarionat origin group i who migrated to the United States at tirec t; Yt0(t)

ia the value of the skill variable for the aarrre insaigraor cohort in Canada.10

The regressioos reported in Table 6 provide one very interesting insight.

For the post-1965 cohorts, with only one exception, the slope coefficient p1

is insignificantly different from unity, and the intercept is

insignificantly different from zero. Moreover, the explanatory power of

these regressions is quite high: the F2 is on the order of .5 to .8. Those

results imply that the expected skills or wages of a specific national

origin group in Canada and the United States (in the 1965-1980 period) sre 4

identical. There is no evidence, therefore, to suggest that the point

4

TASLE 6

RELATIONSHIP RETWEEN SKILLS AND WAGES OF NATIONAL ORIGIN GROUPSIN THE UNITED STATES AND CANADA

(Standard Errors In Parentheses)

Dependent Variable — Mean Education of National Origin Group in United States

CohortVariable 1960-64 1965-70 l91-74 1975-SO

Intercept 3,864a .471 -.502 -1.832(1,298) (1.646) (2.963) (4.556)

Canada Mean 670b .954 1.072 1.196

(.120) (.139) (241) (.366)

R2 .708 .785 .602 .451

Dependent Variable — Mean Wage of National Origin Group in United States

CohortVariable 1960-64 1965-70 1970-74 1975-80

Intercept .040 - .016 070a .063

(.030) (.043) (.033) (.057)

Canada Mean 349b .910 1469b 1.275(.197) (.283) (.215) (.228)

K2 .195 443 .782 .707

Dependent Variable — Adjusted Wage of National Origin Group in United States

CohortVarieble 1960-64 1965-70 1970-74 1975-80

Intercept .043 .032 .031 .065(.027) (.042) (D27) (.042)

Canada Mean .426 1.017 .799 1.068(.259) (.259) (.128) (.150)

8? .173 .543 .751 .797

aSignificantly different from zero at the 5 percent level.

bSignificantly different from one at the 5 percent level.

1L1

system generated a core skilled flow into Canada from within a source

country.

The finding that, on average, irrciigranta in Canada are more skilled than

immigrants in the United States is attributable to another factor. I now

show that the different national origin composition of immigrant flows in

the two countries accounts for much of the Canadian advantage. Let Y(t) be

the average value for a particular characteristic (i.e., education or wage)

observed in the immigrant flow in year t in host country r. By definition,

Y(t) can be wtiiten as:

(Li) Yr(t)—

p.(t) Yjr(t)

where y.(t) is the overage value for the labor market characteristic

observed among persons who migrated from source country j into host country

r in year t; and Pi(t) is the fraction of the host country's immigrant flow

in year c originating in source country j. —

It is useful to define the overage labor narket performance that would

have been ohserved if a different national origin mix had migrated to host

country r, such es the national origin nix observed in host country s,

p.(t). This is given by:

(5) Y(t,s) — p.(t) y(t)

The impact ci a changing national origin mix is then given by the

difference between equations (4) end (5)

15

(6) Y(t) - Y(t.s) — X Yjr(t) FPjr(t) -

The decomposition implicit in equation (6) is similar to that commonly

used to measure wage discrimination (Oaxaca, 1973), and has its roots in the

statistical literature (Kitigawa, 1955). Using this methodological

framework, Table 7 decomposes the differences observed in educational

attainment and relative wages between Canada and the United States for each

of the immigrant waves arriving between 1960 and 1960.

To understand the nature of the results, it is instructive to first

coosidet the cohort that migrated to Canada or the United States in the late

l970s. The average education level of those who migrated to Canada was 12.6

years. while the average education level of those who migrated to the United

States was 11.9 years, a difference of .7 years. Column (3) of Table 7

reports the prediction of what the education level of immigrants in Canada

wouid have been had Canada sdmitted irmsigrants on the basis of the U.S.

national origin mix. In other words, it presents the- prediction from

equation (5) using the 1975-1980 means of educational attainment in Canada

and the 1975-1980 national origin mix observed in the United States. This

prediction is 12.3 yeats, so that the average educational attainment of this

immigrant wave would have been .3 years lover. National origin differences,

therefore, explain almost a half of the observed gap between the educational

attainment of the 1975-1980 immigrant wave in Canada and the United Ststea.

It is also pcssihle to estimate what the average educational attainment

of immigrants in the United States would have been had the U.S. accepted

immigrants on the basis of Canada's national origin mix. In other words,

equation (5) is estimated using the 1975-1980 means of educational

TADLE 7

tECNP0SlTi0H 00 DIFFERENCES EETUEEN CANADA AND THE UEITE2 STATES

Predicted Averages:Canada U.S. if Canada If U.S. had

Aariahle/ Evaraçm Average had U.S. mis Canada mix

04ri UI UI thUfl UI LU iU:UI LULU1

Educat inn:

1960-64 10.506 10.959 - .453 11.202

1965-70 12.043 11.179 .664 11.8181070-14 12.370 11.092 1.270 12.0421075-00 12.633 11.860 .143 12.302

1960-64 -.050 -.051 .0431965-70 -.021 -.160 .130

1970-74 -.084 -.200 .1161973-80 -.172 -.299 .127

NdjusiedEeoc

1963-04 - .049 -.063 .0141065-10 -.097 - .159 .0421970-74 -.161 - .159 -.0021075-80 -.220 -.250 .034

10.760 -.181 -.696

11.694 .515 .22512.642 1.510 .320

13.102 1.240 .301

.030 .009 -.061- .044 .316 .066-.070 .130 .002

.161 .130 .002

.029 .092 .014

-.072 .000 .058

-.004 .065 .072-.172 .000 .069

.253

-.007-.174- .256

- .063

—.155

- .233

- .293

16

attainment in the United States and the national origin mix observed in

Canada in 1975-1980. This prediction1 reported in column (4) of Table 7, is

13.1 years. In other words, the educational attainment of U.S. immigrants

would have increased from 11.9 tn 13.1 years due solely to changes in the

national origin nix. This increase is greater than the observed difference

between Canada and the United States, so that national origin "overexplains"

the obsarved difference.

The reaaining rows of Table 7 report a similar decomposition for both

wagea and adjusted wages for the 1975-1980 cohort, as well as for all other

post-1960 cohorts. It is evident that differences in the national origin

mix between the Iwo hosr countries ate largely responsible ior the post-1965

differences in educational attainment, wages, and adjusted wages. For

instance, the diffetonco in relative wages between the immigrant wave that

arrived in Canada and the United States in 1965-1970 is .139, of which at

least one-half is attributahle to differences in national otigin. The

observed difference for the waves that arrived during the l97Us is around

.12, and over two-thirds of this gap is attrihutable to national origin.11

In contrast to the post-1965 enhorta rhe resulis in Table 7 show that

national origin played a different tole among persona who migrated in the

early 1960s, These data do not indicate that immigrants in Canada were

unambiguously mote skilled than immigrants in the Unired States. Motoover,

the differences in the national origin mix of this immigrant flow sometimes

worked to rhe advantage of the United States: The mean educational

attainment of immigrants in Canada would have increased from 10.5 to 11.2

years if Canada had had the national origin mix of the United States. The

decomposition of tLie wage differential between the two host countries,

17

however, does not yield an unambiguous indication that either country had a

more "desirable national origin mix.

The central implication of these results is clear. Differences in the

national origin mix of iomigrants arriving in Canada and the United States

since 1965 are mainly responsible for the higher average skills and relative

wages of immigrants in Canada. In view of this finding, it is worth

reassessing the role that immigration policy, and in particular a point

sysrem, can play in generating a more skilled immigrant flow. To the extent

that the point system is intended as a way of increasing the skill level of

immigrants from a given source country, the results in t'ahles 6 and 7 are

discouraging. A point system seems to have little effect on the education

level or relative wages of specific natiocal origin groups.

This does not imply, however, that the point system is ineffective. An

alternative, though little diacossed, effect of the Faint system is to

reallocate visas across source countries. Cansidet, for instance, the

impact of the educational requirements in the point system. A visa

applicant is given 1 point per year of education, and only 50 points are

needed to "pass the test." Persons originating in countries with high mean -

educational attainment are mote likely to qualify for entry into Canada than

petsons originating in countries with low educational attainment. The

population of the source countries differs suhstantially in mean education

levels. For instance, the average educational attainment is 3.2 years in

Haiti, 6.1 years in Mexico, 10.7 years in the United Kingdom, and 11.1 years

in France,12 It is likely, therefore, that the point system plays an

important role in determining the national origin six of the immigrant flow.

The extent to which the point system actually redistributes visas among

18

source countries has not been analyzed. As a preliminary way of

establishing this link, I calculated the frsction of isasigrants that

Imigrated to Canado (our of the total number of immigrants into Canada and

the United StoLes) for 40 source countries in the late l970s. The

relationship between this choice" variable and moan educational attainment

in the source country is suauearized by:13

(7) log[F/(1-P)] - -2.3035 ÷ .1971 S. .178,

(3.58) (2.67)

where P is the fraction of the Icusigrant flow that "chose' Canada; S ia the

mean educational attainment in the aource country; and the i-statistics are

reported in paranthoses. Equation (7) was cstimated using a aiuieum

grouped-logit estimator. Evalusted at the mcan probability, an incroasc of

one ycar in the average schooling, level of the suurca country incteases the

likelihood that imaigronts "choose' Canada by about 3.6 percentage points.

This prelioioary analysis thus suggests that the point system plays a

subtle, but ctucial, role: it biases the admission of ireeigtonts towards

rational origin groups that originate in high-income, high-skill countriea

My findings imply that it is this feature of the point systers which Is

mostly responsible for the different performance ci ituiiigrants in Canada ond

in the United States during the post-l963 period.14

VI. Migration Flows Between Canada and the United Stares

The large migration flows between Canada and the United irstes provide

further evidence en the limitations and effectiveness oi Canada's point

4 systeo.1 In 1900-1981, nearly 850 thousand persons born in Conado resided

19

in the United States, and over 300 thousand persons born in the United

States resided in Canada. The emigration of Americans accounted for 8

percent of the foreign-horn population in Canada, while the emigration of

Canadians accounted for 6 percent of the foreign-born population in the

United States.

Table 8 reports the mean educational attainment and relative wages for

several waves of iransnaiional migrants. These data yield several

interesting facts. Tn general, Cenadian immigrants in the United States do

quite well in the labor market. The most recent arrivals enumerated in Liie

1980 Census earn about 20 percent higher wages than American natives and

have about 2 years more schooling. Tn contrast, American immigrants in

Canada are less successful. The most recent arrivals enumerated in the 1981

Census earn 4.5 pernent loss than Canadian natives yet have 4.5 yaara gg

schooling.

in addition, the data indicate little growth in immigrant earnings over

time (relative to natives). For instance, the U.S. Census shows that the

rrsat recent arrivela enumerated in the 1970 Census had 14.9 percent higher

wages than natives. Ey 1980, this differential had increaeed to only 17.2

percent. In Canada, the typical irmnigrant who arrived in the late 1960s

earned 30 percent more than natives in 1970, but earned only 10.6 percent

more than natives in 1980. There is little evidence of assinilation in

these data. In fact, the Canadian Census suggests the possibility of "dis-

assimilation.

Finally, there was a sizable decline in skills among successive waves of

American immigrants in Canada, but an intrease among suncesaive waves of

Canadians in the United States. In 1970, the newly arrived Americans had

4

10500 8

EDUCATION AND 60360 01 100NSNAIIONAL IWIIGRANTS, 89 [00001

Raerioano in Cenada: Canadians in U.S.

-

1971 1901 1971 1991

keLative Relatine Relative RolativoCohort Education CdLivnt inn 9999 Eduvatlon 99 Education 9928

1960-64 19.698 .5320 15.243 .0218 11.36.6 .1248 12.156 .1427

(1.01) (_34) (4.21) (7.13>

1965-70 16.444 .2097 16.235 .1059 12.599 .1488 12.599 .1722

(6.14) 12.59) (4.72) (7.03)

1970-74 --- - (5.985 .0819 --- -- 13.740 .1124

11.013 (3.31)

1975-83 --- -- - 15.909 - .0454 - --- 14.604 .2021

(-.895 (7.90)

Note: The (-ratios are repor:od in paronoSesos. Tim oman educational a((airinont of natives ii, Conadn

in 9.907 in 1971 areS 11.303 in 1981. (ho moan oduoatiena( attairinen( of na:i000 in (ho United Staten

is 11.515 in 1911 and 12.706 ic 1981. The saaple nicen are an follows: 1971 Canadian Census: 5>1

Anorican innigrano and 28049 natiaon; 198) anadian Census: 920 Amotloan Innigrents and 61225 natioan

1070 U.S Cantos: 3430 Canadian innigrents areS 20978 natinas> 1903 14.0. Cennon: 7293 Canadian

ialoiorontn areS 15071 natives.

20

6.5 more years of schooling and earned 29 percent more than natives, but by

1980 the most recent American immigrants had 4.5 store years of schooling and

earned 4.5 percent less than natives, in contrast, the newly-arrived

Canadians enumerated by the 1970 U.S. Census had 1.4 more years of schooling

and 14.9 percent higher wages than natives, but the most recent Canadian

immigrants in 1980 had 1.9 more years of schooling and earned 20.2 percent

more than natives.

Some of the statistics in Table 8 may be contaminated by the migration

of draft avoiders tc Canada in the late l960s and early l970s. A

presidential pardon allowing their reentry into the United States was

declared in 1978. Because the empirical analysis below uses the 1971/1981

Canadian Censuses to track the wages of cchorts ci American migrants, it is

possible that the influx of the draft avoiders entatierated in the 1971

Canadian Census, and rheir possible return migration to the U.S. prior to

the 1981 Census, biases the analysis.

There are no reliable estimates of the number of draft avoiders, nor of

their return migration rates. The 1911 Canadian Census enumerated onLy 4800

American-bern young men (aged 18-25) who had migrated between 1946 and 1971.

The 1981 Canadian Census enumerated 4250 American-bern men aged 28-35 (who

had migrated in 1966-1971). Both the size ci this aigraticn flow and the

return migration rate are relatively small. it is unlikely, therefore, that

the migration of Vietnam draft avoiders is driving the results of the

analysis (and this ilow could certainly not explain the increasing skills of

Canadian iessigrants in the United States).

l7ithin each host country, the samples of natives and of transnational

migrants were used to estimate the earnings tunctions in (1) and (2). I

21

then predicted the (relative) eniry wage oE the tranenational migrants in

each of the host countries, as well as tha growth rate after 10 and 20 years4

in the host country. These summary statistics are reported in Table 9.

The most tecent Canadian immigrants in the United States (i.e. the

1975-1980 wave) entercd the labor market with essentially the aaise wage as

natives, while the most recent Americans in Canada entered the Canadian

labor market with much lower wages than natives. This situation is quite

different from what wss observed in the early l9GOa. At that time, the most

recent Canadians in the United Stares had slightly lower wages titan natives

(though the difference was not statistically significant), while Americans

in Canada entered the labor market with much higher wages than natives.

The relatively better performance of recent Canadian immigrants in the

U.S. labor market stay be a result of a different selection process guiding

the migration of persons across the U.S. -Canada border. In earlier work

(Borjas, 1987), I argued that international differences in the rate of

return tn skills are the nain determinants of the skill composition of

immigrant flows. The results presented in Tables B and 9 are consistent

with this hypothesis if Canada has a lower rate of return to skills than the

United Stares. In fact, the available e'iidence suggests that the Canadian

income distribution is more compressed than that of the United States, so

that skilled Canadians are likely to have greater incentives to migrate to

the United States than unskilled Canadians (Mciatters and Beach, 1989).

Regardless of the validity of this hypothesis, the results presented in

this section suggest that the point aystem plays a much weaker role than

would have been presumed. Because of the skill filters explicitly built

into Canadian immigration policy end the absence of such filters in U.S.

TABLE 9

PREDICTED ENTRY WAGES AND GROWTH RATES FOR TRANSNATIONAL IMMICRA}4TSIN CANADA AND THE UNITED STATES

Americans in Canadians inCanada Untied SLates

Cohen Ui. Ui. (Ii. LU1960-64 .2055 .0607 - .0509 - .0952

(1.90) (.59) (.1.10) (-2.21)

1965-69 .1098 - .0426 - .0150 - .0509(1.29) (-.52) (- .37) (-1.36)

1970-74 .0120 .1174 . .0674 - .1182(.14) (-1.34) (-1.47) (-2.78)

1975-80 - .2368 -.3275 .0521 -.0231(-2.79) (-4.06) (1.45) (- .81)

Growth Rate - .0053 -.0084 .0397 .0119

y=1O (-6.79) (-5.98) (.37) (1.55)

Growth Rate, - .0018 -.0018 .0046 .0059

y—20 (-6.68) (-5.91) (.22) (1.69)

Holds Constant No Yes Ho YesDemo graphicCharac ce na tics

Note: The t-ratios are reported in parentheses, The vector X in theregressions underlying the estimates in columns (1) include age and agesquared. The regressinns in column (2) add education, marital status,metropnlitsn residence, and an indicator of whether health limits work(available only in the United States).

I

22

immigration policy, It is not unreasonable to expect that American

immigrants in Canada would do well in the Canadian labor market and thatS

Canadian immigrants in the United States would be less successful. The

facts, however, are exactly the opposite. The self-selection generated by

the differential economic opportunities available to skilled and unskilled

workers in the two countries greatly dilutes the expected impact of Canada's

point system.

VII. Summary -

Because immigration policies in Canada and the United Scares differ in

their objectives, the comparison of the economic impact of immigrants in the

two countries provides a benchmark for assessing the role played by pclicy

in determining the skill composition of the immigrant flow. This paper

presented a description of the trends in immigrant skills and labor market

performance in both Canada and the United States, and interpreted these

trends in terms of the underlying policy changes that occurred between 1960

and 1980 in both host countries.

The data provide a clear and unambiguous picture of the skills and labor

market perfotxance of immigrants in the two countries. Immigrants in Canada

are, on average, more skilled than immigrants in the United States, This

result is evident from comparisons of educational attainment, where

immigrants in Canada have about a year more schooling at the time of arrivai.

than immigrants in the United States, as well as in terss of immigrant

wages, where the wage disadvantsge of immigrants (relative to natives) is

substantially greater in the United States.

The empitical snalysis suggests a simple explsnstion for the skill

23

differential. The average skill level of specific national origin groups is

about the same in Canada and the United States, so that Canada's point

system does net attract more skilled workers from a given source country.

The national origin mix of the Canadian immigrant flow, however, is more

heavily weighted towards national origin groups that tend to perform well in

hoth the Canadian and U.S. labor warkets. It is this compositional effect

that HexplainsI most of the observed differences in the educational

attainment and wages of immigrants in Canada and the United States.

In effect, the point system works because it alters the national origin

mix of iremigtsnt flows. This finding has important, if unpalatable,

impticatlons fur the ongoing debate over the role that the skilla of visa

applicants should play in determining entry into Canada or the United

States. To a large extent, skill filters are effective because they alter

the allocation of visas across source countries. The data analyzed in this

paper, therefore, suggest an important tradeoff between the average skill

ltvel of immigrant flows and their ethnic diversity. The existence and

implications of this tradeoff are likely to play an important role in future

discussions of imnigratinn policy.

I

24

FOOTNOTES

*Frofessor of Economics, University of California, San Diego, and Research

Associate, National Bureau of Economic Research. I am grateful to Michael

Abbott for useful comments and to the National Science Foundation (Grant No.

SES-880928l) for financial support.

1. There was also a sizable transnational migration between Canada and

the United States. The size and skill composition of this flows is

discussed in detail below.

2. See Abbott sod Beach, 1987; Bloom and Gunderson, 1991; Borjaa,

1990s; Chiswick, 198]; and Tandon, 1978.

3. See Duleep and Regets (1990) For additional evidence that the skills

of immigrants from specific source countries vary little hetween Canada and

the United States.

4. Borjas (1990a) presents a comparative review of Canadian and U.S.

immigration policies. See also Boyd (1976) and Keeley and Elwell (1981).

5. The particular allocation of points discussed in the text became

effective in 1967.

6. The intervals reporting the imoligrant's year of entry into the host

country differ between the Canadian and U.S. Censuses. For the post-1960

cohorts, however, these variations are relatively unimportant. The

probabilities reported in Table 2 weigh the observations in each of the

Censuses so as to ensure that the underlying time period defining each

cohort has the same duration in the two host countries.

7, The 1910 U.S. native sample is a 1/1000 extract, while the 1980 U.S.

native sample is a 1/2500 extract.

8. The growth rates are evaluated by calculating the slope of the ago

25

earnings profile at the relevant age end years-since-migration values. The

staristics reported in Table 4 differ slightly from those that can be

calculated from Tables A-i and A-2 because of rounding errors in the

reporting of the regression coefficients.-

9. The U.S. Censuses report many more source countries than the

Canadian Census. The main drawback of the Canadian Census is that the

specific source country of Asian or Latin American immigrants is not

identified.

10. Because the dependent variables are themselves estimates of the true

means, the regressions are estimated using generalized least squares. It is

worth noting, however, that the unweighted regressions lead to the same

qualitative conclusions as the CLS regressions.

11. These education data are reported in Borjas (l99l Tahle 2), and

give the average educational attainment of the population of the source

countries in the late 1970s.

12. It is of interest to determine the extent to which these findings

are driven by the presence of large numbers of relatively unskilled Latin

American immigrants in the United States. I reeatimated the atatistics

reported in Table 7 after emitting the saiopie of Latin Americans from the

analysis. Suppose, for instance, that there were no Latin American

immigrants in the 1975-1980 cohort in either Canada or the United States.

The average wage of immigrants would be - .144 in Canada and - .173 in the

United States, if Canada had the same national origin mix as the United

States, the predicted wage would be - .198, while if the United States had

the same national origin mix as Canada the predicted wage would be - .099.

Therefore, the results indicate that, although Latin American immigrants in

t

26

the United States substantially reduce the average skill level of U.S.

immigrants, differences in the national origin composition of the immigrant

flow still favor Canada.

13. The 40 countries included in this analysis are listed in Borjas

(1957).

14. The empirical analysis presented in Section IV also indicated a

sizable decline in skiiis among successive immigrant waves in both host

countries, with the decline being much steeper in the United States. I have

shown elsewhere (Borjas, 199Db) that much of the U.S. trend can be

attributed ic the changing national origin mix of immigrant flows.

Preliminary calculations (not reported) indicate that national origin plays

a weaker (though still important) role in explaining the declining skills of

immigrants in Canada.

15. These flows have long been of interest to Canadian demographers.

See Boyd (i9Bl). Lavoie (1972), and the many references in U.S. Department

of Commerce (1990).

27

REFERENC ES

Abbott, Michael C. and Charles M. Beach, 1987, Immigrant EarningsDifferentials and Cohort Effects in Canada, Hirseograph, Queen's University.

Bloom, David E, and Morley K, Conderson. 1991, An Analysis of the Earningsof Canadian immigration. In Isaeigration. Trade, and the Labor Market,eds, , John H. Abowcl and Richard B. Freeman. Chicago: University ofChicago Press.

Botjas, George J. 198]. Self-Selection and the Earnings of Iasiigrants.American Econoaic Review 77:531-553,

________________ - 1990a, Friends or Sfrance_xa: The Iaoact of Immisranta onthe US, Economy. New York: Basic Books.

________________ 1990b. National Origin and the Skills of Irrsoigranra inthe Postwar Period. Mimeograph.

________________ 1991. Iaaeigration and Self-Selection, In Isaigratio.,,Trade. End the Lsbor Market, eds., John N. Abowd and Rithard B. Freeman.

Chicago: University of Chicago Press.

Boyd, Monica. 1976. Immigration Policies and Trends: A Comparison ofCanada and the United States. Dersograp 13:83-104.

___________- 1981, The American Emigrant in Canada: Trends and Consequences.International Mig,ration Review 15:650-670,

Chiswick, Barry B. 198]. Immigration Polities, Source Countries, andImmigrant Skills. Mimeograph.

Doleep, Harriet Orcutt and Mark C, Rogers. 1990. Some Evidence on theEffect of Admission Criteria on Immigrant Assimilation: The EarningsProfiles of Asian Immigrants in Canada and the United States. Mimeograph.

Jasso, Guillermios and Mark B. Rcsenzweig. 1986. What's in a Name?Country-of-Origin Influences on the Earnings of Immigrants in the UnitedStates. Research in Human Caojtaj. and Development 4:75-106.

Kaely. Charles B, and F, Elwell, 1981. International Migration: TheUnited States and Canada. In Global Trends in 'lisration, ads.Mary Kritz and Silvano Tomasi. New York: Center for Migration Studies.

Kitigawa. Evelyn N. 1955. Components of a Difference Between Two Rates.Journal of the American Statistical Association 50:1168-1194.

Lavoie, Yolande, 1972. L'emiyration das.Canadiens aux Etats-Unis Avant1930. Montreal: Canada Presses de I'Universite de Montreal.

Leecy, F.M., editor. 1983. Historical Statistics of Canada, SecondEdition. Ottawa, Canada: Statistics Canada.

I

28

MeWatters, Catherine C. and Charles N. Beach. 199. The Changes BehindCanada's Income Distribution: Cause for Concern? Mimeograph.

Oaxaca, Ronald, 1973. Male-Female Wage Differentials in Urban LaborMarkets. Inrernational Econopiict Review 14:693.709.

Tandon, B.B. 1978. Earnings Differentials Among Native Born and ForeignBorn Residents of Canada, jjernaiionsl Migration Review 12:406-410.

U.S. Department of Commerce, Bureau of the Census. 1990. Migration BetweenCanada and Lho United States. Washington: U.S.Covernaent Printing Office.

U.S. Immigration and Naturalization Service. Various Issues. StatisticalYearbook, Washington: U.S. Coverninent Printing Office.

TABLE A-i

LOG SM.CE REGRESSIONS CN POOLED 1971 AND 1981 CANADIAN CENSUSES *

(13 (21

Variable NaLhi&5. Irsni#rants Natives jj1pp5rants

Intercept 1.0613 .9275 .3231 .4655

(36.37) (15.52) (31.17) (7.96)

Education -- -- .0438 .0364

(84.79) (43,75)

Age .0563 .0556 .0564 .0498

(36.89) (19.16) (40.49) (17.80)

Age Squared -.0006 . .0006 - .0006 - .0005(-36.55) (-19.08) (-36.12) (-17.07)

Yeats-Since- - .0043 -- .0054

Nigration (2.06) (2.72)

Years-Since- .00002 -- - .00003

Migration (.39) (- .76)Squared

1970-74 Cohort .0488 -- .0511(2.73) (305)

1965-69 Cohort .1576 - - .1514(9.66) (10,17)

1960-64 Cohort .1206 -- .1597(5.84) (8.06)

1950-59 Cohort .1139 -- .1597(5,04) (7.32)

Pre-19SO Cohort - - .1046 - - .1773(3.28) (5.71)

Observation irois - .9651 - .9651 - .9427 - .94271971 Census (-248.35) (-248.35) (-238.26) (-738.26)

.399 .456

Holds Constant No Yes

DemographicCharacteristics

Note: The c-ratios arc reported in parentheses. The regressions in column(2) also control for marital status, metropolitan residence, and anindicator oP whether health limits work (available only in the UnitedStares). The index indicating if the person migrated after 1975 is theomitted dummy variable. The sample size is 114,689.

TABLE A-2

LOG WAGE REGRESSIONS ON POOLED 1971. AND 1981 U.S. CENSUSES

(1) (2)

Siariable Natives 1jigrants Natives IiemiLrants

Intercept .8298 .4387 - .1012 - .0483(17.43) (17.41) (-2.18) (-1.99)

Education -- -- .0558 .0442(63.12) (143.54)

Age .0560 .0628 .0490 .0494(24.05) (50.88) (22.31) (42.24)

Age Squared - .0006 - .0007 . .0005 - .0005(-22.27) (-48.82) (-18.91) (-38.05)

Years-since- - - .0053 -- .0090Migration (5.07) (9.16)

Years-Since- - - - .0001 - - - .0001Migration (-4.00) (-7.34)Squared

1970-74 Cohort -- .0588 -- .0659(7.95) (9.43)

1965-69 Cohort - - .1395 - - .1090(14.86) (12.31)

1960-64 Cohort - - .1967 -- .1358(15.64) (11.44)

1950-59 Cohort - - .2414 -. .1554(15.08) (10.26)

Pre-1950 Cohort - -. .2798 - - .1523(12.92) (7.44)

Observation from - .6837 . .6837 - .6105 - .61051971 Census (-133.23) (-133.23) (-125.07) (-125.07)

R2 .192 .289

Holds Constant No YesDemographicCharacteristics

Note: The t-ratios are reported in parentheses. The regressions in column(2) also control for marital status metropolitan residence, end anindicator of whether health limits work (available only in the UnitedStates) . The index indicating if the person migrated after 1975 is theomitted dummy variable. The sample size is 210,732.

Title

is the Fisher Effect for Peal? ARaexaninaticn of the RelationshipBetween Inflation and Interest Rates

Asset Petunia ant Interterrp3ralPreferences

Decoupling Liability: CptisalIncentives for Care ant Litigation

laiy do Cruntrica ant Industries with

Large Seasonal Cycles also Have largewsiness Cycles?

Cur-renoy Suhatitution ant the Fluctu-ations of Foreign-Exchange Reserveswith Credibly Fixed Exchange Rates

Persistent Diffemcea in Nationalproductivity Grcnth Rates with aCcninn Tnclogy ant Free CapitalMcIility

shareholder trading Practices andCorporate Irivestnent Horizons

Nursing Hat Discharges ant Ethaustionof Medical Benefits

Actual and Warranted Relations BetweenAsset Prices

The Invisible Hand ant ltdern WelfareEonxidca

Price Fepilibrium, Efficiency, andIntralizability in Insurance Markets

Measuring Risk Aversion Fran ExcessReturns on a Stodc Index

Exchange Pate Volatility andInternational Prices

The fliforceability of Private HaneyContracts, Market Efficiency, andTedutlcqical (lange

Why Are Prices Sticky? PreliminaryResults Fran an Intcrvieil Study

Ni.nrber Author

3632 Frederic S. Miahkin

3633 Shauel KanielRcbert F. Stanhaugh

3634 A. Mitchell PolinskyYeon—KcxDn the

3635 J. Joeeçti PeaulienJeffrey K. MacKie-+lasonJeffrey A. Miron

3636 Alberto Giovannini

3637 Willem H. muterKenneth K. Kletzer

3638 Kenneth A. FrootAndre F. PeroldJerai C. Stein

3639 Alan N. GarterThains E. Maclirdy

3640 Andrea E. BeltrattiRctert J. Shiller

3641 Joaeçb E. Stiglitz

3642 Richard Arnott

JoseEt E. Stiglitz

3643 Ray thouPebert F. DgleAlex Kane

3644 Rthert C. FeenstraJon P. Kendall

3645 Gary Gorton

3646 Alan S. Blinder

Pets

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Wisher Author

3647 James B. RebitzerLall J. Thylor

3645 Inns N. thristof idesAndrew J. Oswald

3649 James M. Poterba

3650 Joshua AizenmanPeter Isani

3651 Earl L. CrinolsSteien J. Thntovsky

3652 &uca C. CresnwaldJosqth E. Stiglitz

3653 Steven N. Kaplan

3654 Raquel FernandezStile Ozler

3655 lawrence KatzAlan B. Krueger

3656 Jaat A. FrenkelAsset EazinSteve Symansky

3657 Jases Levireohn

3658 Giancarlo OrsettiNcuriel Roubini

3659 ltKinley L. BlackhurnDevid E. Bln

3660 Devid K- SloanGilles Crenier

3661 Arvini Paragariyai Podri]c

Work Incentives aid the Demand for 03/91Primary aid Cbntingent Labor

Efficient and Inefficient fliloynent 03/91Oatares: A Shxly Based on Canadianttruct OstaThx Policy to sitat GlcbaI Warring: 03/91On Designing a Carbon mx

Externalities, Dntives, and Failure 03/9 1to Achieve National Objectives inIntralizcd Fixtrnnies

Stochastic Dguilibrium and loictange 03/91Rate Detersinatiat in a Small OpenEctnw with Risk Averse CptinizingentsInformation, Finante, and Markets: The 03/91Artthitecture of Allocative Mechanisms

The Stayirq lts.ier of Levengad Buyonts 03/91

Edit Onnoentration and Secondary Market 03/91Prices: A Theoretical and flspiricalAnalysis

The Effect of the New Minhltum Wage law 03/91in a trw-Wage labor Market

International VAT Hanionization: 03/91Fctnanic Effects

Testing the laports-As-Market— 03/9 1Discipline Hypothesis

Fiscal Deficits, Peblic Debt aid 03/91Covernient Solvency: Evidence fran can)Ctuntries

The Distritution of Family Intnne: 03/91Measuring aid Explaining tharqes in thel980s for Canada and the United States

The Earnings of Linguistic Minorities; 03/91French in Canada aixi Spanish in theUnited States

Pblitical-Foancsny Argisients for aUniform Thriff

03/91

3670 Katlityn N. IxnninguezPeter B. Kenen

3671 Janes P. I&,r}ansen

Fidwan P. MoreyMarcy Ole.dler

3672 Rachel btOllodi

3673 Kala KrishnaRefiic BrzanLing Miii Tan

3674 Michael W. KleinKaren K. lewis

3675 Jeffrey A. MironJeffrey Zwithel

3676 Bruce N. tehnnann

3677 Bruce N. lehmann

flueTargeting the Ecctharnge Rate: Anipirical InvestigationWhy Are There So Marty Divid& SenateDalagations?

Wage rgaining ant Unisiploymentpersistence

Dienion ant Hetercxgertity of FinnPerfounarcee in Nine French Iniustrina,1984—1967

R&Dand Productivity: A Survey ofFxx'nceetrjc Stodies at the Finn Level

(Thangea in the Structhre of Wages inthe Public and Private Sectors

Distributive Politics and FarinanicGrowth

Govertetnt, Financial Markets, andF.rornnic Onvelcçrent

On the Need fri Alla' for theitesibiity that Covenirnents Mean WhatThey Say

aivixonnerrtal Policy When Marketstructure and Plant locations areEniogenais

Investnent Policies in the CNIT

Rent Sharing in the Multi-FibreArrangonent: Theory ant Evidence franUS Apparel Irrprts fran Hong Pang

Learning Aixut Intervention TargetZones

Alothol Ctnsunption Daring Prubibition 04/91

Earnings, Dividend Policy, and Present 04/91Value Relations: &iilding Blocks ofDividend Policy Invariant Cash Flows

Motes on Dynasic Factor Pricing MixIels 04/91

Mutter Author

3662 Shula PessachAssaf Paz in

3663 Alberto AlesirtaMorris FiorinaHcMard Pasenthal

3664 Olivier Jean Blanchard

3665 Elizabeth KrenipJacques Mairesse

3666 Jacquea Mairesse

3667 lawrencE F. KatzAlan B. Krueger

3668 Alberto AlesinaDani Rcdrik

3669 Joeqth S. Stiglitz

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3684 Yanneth A. FrootKenneth Regoff

3685 Ardrew K. Roserare E. 0. Svensson

3686 Hersctiel I. Grussnan

3687 James tri,Gary Cotton

3688 Steven C. AllenRobert L. ClarkAnn A. McDermsl

3689 Midiael D. BordoPeter Ragpop3rtAnna 3. Sthwartz

3690 Robert DekleLawrence Sueners

Tithe

Purthased Services, cxitsourcing, 04/91caipiters, aid Productivity inMonufacturimg

Trade Liberalization in a Wfltmnntil 04/9 1Dominated In8ustry: A Theoretical aidAç1iai Cereral-ilthrium AnalysisEningernis Gapital Utilization aol 04/91Productivity Measurement in DynamicFactor Dsnaid Pbiela

3691 George J. norjas Inuigration Pelicy, National Origin, 04/91aid Inuigrant Skills: A Qzparison ofCsnada aid the United States

Ctpies of the above working papers can be obtained by serding $3.00 per cwy ifrequested within the continental U.S.; $4 .00 per oç'y for all other locationsto Working Papers, NUER, 1050 Masaactusetts Avenue, Caitridge, MA 02138.Advarce payment is required on all orders. Please rake thecks payable to theNational ftireau of Econaric Researd-i.

Ni.ster Author

3678 tbnald SiegelZvi Grilithes

3679 Lirila HunterJesse R. NarkusenThc*aas F. Thitherfoid

3680 IThEpuar R. PruobaM. Ishaq Nadiri

3681 Robert F. ErqleVictor K. Hg

3682 Robert F. EngleVictor K. Hg

3683 Kathryn N. tfluinguez

Measuring aid Testing the Ispact of 04/91News on Volatility

TUne-Varying Volatility aid the Dynamic 04/918ehavior of the Term Structure

Th Exithange Rate Auctions Work? An 04/91Examination of the Bolivian Experience

The E1, the flU, aid the Transition 04/91to a Ctnron O.Irrency

Expected aid Predicted Raalignnents: 04/91The /ai Rate cur Ut5 the fits

Monetary Ecornuica: A Review Essay 04/91

Trading, O:nrurUcation aid the Response 04/91of Price to New Information

Pensions, sordlig, aid Lifetini Jobs 04/91

Money Versus Credit Rationing: Evidence 04/91for the National Banking Exa, 1880—1914

Japan's High Saving Rate Reaffirmed 04/91